Saudi Aramco has priced its long-awaited initial public offering at the top end of its range, making it the world’s largest new listing.

The state oil giant raised $25.6bn, surpassing Chinese ecommerce group Alibaba’s 2014 $25bn share sale in the US, giving Saudi Aramco a valuation of $1.7tn. This is more than the combined market capitalisation of the five biggest international oil companies.

Two people familiar with the matter said shares had priced at 32 SAR ($8.53) each, which is at the top end of the 30-32 SAR indicative price range the company announced last month. Saudi Aramco declined to comment.

Despite the record breaking figure, the regional share sale is a scaled-back version of the kingdom’s initial ambitions.

The flotation will rely heavily on local money after Saudi Arabia decided against marketing the listing outside the Gulf amid lukewarm demand from overseas institutions that baulked at the valuation expectations of the kingdom’s officials.

The pricing at the top end of the range, sought after by the kingdom’s leadership, came even as some bankers working on the deal had argued that a more prudent approach would be to issue at the middle of the range to encourage buying in the after-market and for shares to trade higher later, one person close to the process said. “The banks advised the client to play it safe,” the person said. “There is a risk to the lenders if the shares trade down.”

Saudi Arabia had sought to raise $25bn from a sale of 1.5 per cent of the state oil company — the country’s biggest revenue generator — on Riyadh’s Tadawul stock exchange, hoping to secure a valuation of up to $1.7tn.

For much of the past four years, since plans for the listing were first disclosed by Crown Prince Mohammed bin Salman, the kingdom had pushed to raise $100bn from a sale of 5 per cent at a $2tn valuation.

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